Monday, December 20, 2021, 5:43 pm
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Mid-afternoon, the Mississippi Department of Agriculture and Commerce (MDAC) filed a motion with the Bankruptcy Court asking permission to proceed with investigation and hearing into whether Express Grain filed doctored audit reports to support the license renewals for its grain warehouses in Greenwood, Sidon, and Minter City.
Grain warehouses are regulated by the MDAC, whose current commissioner is Andy Gipson.
In a letter last Friday, Gipson had warned Lt. Gov. Delbert Hosemann and Chuck Younger, chairman of the Senate Agriculture Committee, that it appeared that there was "a willful falsification of material facts, including falsified financial statements and a materially altered auditor's opinion(s), by Express Grain Terminals, LLC."
But in today's court filing, the MDAC went further in its accusations. The filing may be seen here: Motion for Relief from Automatic Stay
Under federal bankruptcy law, it is necessary to request permission of the court before other legal or court action is taken against the debtor.
MDAC is asking to commence "regulatory and judicial proceedings to enforce the Department's police and regulatory powers ... to suspend, cancel, or revoke the Grain Warehouse Licenses ... issued to John Coleman, Express Grain Terminals LLC...."
Grain warehouses seeking licenses must provide certified financial statements to the MDAC. They also must submit sworn financial statements annually that are prepared by a licensed accountant.
According to MDAC's filing, Express Grain submitted on May 27, 2021, what was purported to be an "independent auditor's report" by its accounting firm, Horne LLC.
But when MDAC demanded a copy directly from Horne LLC last Friday, the report it provided was significantly different than the copy submitted by EG last May.
MDAC has asked the court to allow these two differing documents to be filed under seal, and the court has scheduled a hearing on that request.
According to MDAC, EG removed a portion of the auditor's report titled "Emphasis of Matter Regarding going Concern."
In addition, the Operating Income was changed from a loss to a positive income.
The letterhead used in the auditor's report was changed to a letterhead that Horne no longer uses.
MDAC also claims there are "numerous material alterations" that it will demonstrate at a hearing.
MDAC further asserts:
The Department believes that the alterations made by Express Grain to Horne LLP's May 20, 2021 report were made with intent to deceive the Department concerning Express Grain's true financial condition and were willful, intentional, malicious, deliberate and were not the result of an honest mistake, inadvertance, or oversight.
MDAC states that a final decision regarding the EG licenses will be made at an administrative hearing. They could be canceled, suspended, and/or revoked.
John Pittman Hey
The Taxpayers Channel
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